Rep. Nangle sees long odds for non-profit property tax proposal

BOSTON -- The Lowell Democrat behind a House proposal to force non-profits to pay local property taxes does not believe the idea will survive negotiations on Beacon Hill this week, but he's already gearing up for a more fulsome debate next session when he plans to fine tune the plan to limit its impact.

"Do I anticipate it going through the conference committee? Probably no. I'm a realist," Rep. David Nangle told the News Service in a recent interview.

Nangle conceded that the idea, which was attached through an amendment in the House to a major economic development bill, did not have a public hearing this session and some lawmakers, particularly those in the Senate, remain uncomfortable with the plan.

"I just think there's certain individuals, not on the House side, maybe on the other side that are a little leery or nervous giving in to it," Nangle said.

The House earlier this month approved legislation intended to finance numerous grants and tax credits that Gov. Charlie Baker and lawmakers see as critical to spurring continued economic growth across Massachusetts.

The Nangle amendment would require any charitable non-profit organization or educational institution currently exempt from paying local property taxes to be subjected to property taxation of a declining scale for four years when they purchase new property.

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The organizations would pay 100 percent of the property tax bill in year one, 75 percent in year two, 50 percent in year three and 25 percent in year before before the property dropped off the local tax rolls.

From Lowell, Nangle has watched as the University of Massachusetts Lowell in recent years has transformed itself and, in many ways, the city through expansion and construction of new academic buildings and dormitories. But with that growth and the positive impacts that come with it is also the downside of lost tax revenue for the city, according to Nangle.

"All of a sudden in one swoop of a pen, poof, it's gone. Three hundred and twenty thousand dollars is taken off the tax rolls," Nangle said. He referenced a recent purchase by UMass Lowell of the Perkins Mill building in that city that happened after private negotiations with the property owner and gave the city little time to accommodate for the sale in its budget.

"I think it's a fair and equitable solution that gives the city or town the opportunity to come up with a master plan, or strategic planning as to how they can possibly replace those dollars that are taken off the tax rolls because inevitably, they can spin it anyway they want, that loss of revenue is undoubtedly picked up by the taxpayers, generally the homeowners, in that city or town," Nangle said.

The competing economic development bills are currently before a six-member conference committee led by Rep. Joseph Wagner of Chicopee and Nangle's fellow Lowellian Sen. Eileen Donoghue. The conference committee is expected to produce a final version of the bill for consideration before the end of formal sessions on Sunday.

Donoghue, before she was appointed to lead the conference committee, told The Sun of Lowell that Nangle's amendment "poses an interesting idea and question," but suggested more consideration should be given to limit its effects on smaller non-profits, according to the newspapers.

Others at the State House have pointed out that a public college like UMass, unlike private institutions such as Harvard University, would be paying property taxes out of a budget financed with state tax revenue and student tuition.

Sensing long-odds that his proposal will be included in a final package, Nangle said his staff is working to prepare a more complete bill that he hopes to file in November or December that would retain the sliding tax scale, but limit its application to non-profits and educational institutions of a certain size, with the financial resources and payroll that would suggest it can afford to pay.

"It will eliminate probably 95 percent of the non-profits that are probably down here right now raising their concerns and issues," Nangle said.

More than a dozen major organizations from the health care, housing, human services and education sectors have written to lawmakers warning that the non-profit tax would "shatter the social compact that the nonprofit sector and government have worked for so long to build." In a letter, the groups said the tax plan would "significantly impede the operations of nonprofits, harm their fiscal solvency and threaten access to essential programs for residents across the state."

Nangle said he never intended the amendment to harm local YMCAs, sober homes or Kiwanis clubs, for example, but rather thought institutions with capital and high executive compensation, such as UMass, could afford to pay.

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